PG&E Offers $250K Reward In South San Jose Grid Attack

The incident has been called the most serious domestic terrorist attack on the country's electrical grid.

Pacific Gas & Electric Co. offered a $250,000 reward on Thursday for information leading to an arrest and conviction in an attack nearly a year ago on phone lines and the power grid in Silicon Valley.

The attack on April 16, just a day after the Boston Marathon bombings, involved snipping AT&T fiber-optic lines to knock out phone and 911 service, and firing shots into a PG&E substation.

Millions of people in Santa Clara County were asked to conserve energy after power lines were damaged.

Former Federal Energy Regulatory Commission chairman Jon Wellinghoff called the incident an act of terrorism.

However, FBI spokesman Peter Lee has said the investigation is ongoing and the agency has no indications to back that up.

The sniper bullets knocked out 17 transformers powering parts of Silicon Valley and caused $15 million in damage.

Officials rerouted power to avoid a blackout, but it took PG&E workers nearly a month to repair the damage. No arrests have been made.

Wellinghoff, who was in office during the incident, said he reached his conclusion after consulting with Defense Department experts about the attack.

PG&E has said it plans to install opaque walls and deploy advanced camera systems, enhanced lighting and additional alarms at the San Jose substation and other sites.

A California lawmaker, meanwhile, has introduced legislation that would require state utilities to beef up security.

The bill by state Sen. Jerry Hill, D-San Mateo, would require utilities to assess security risks and make needed improvements. The bill would also require utilities to better coordinate responses to security breaches with law enforcement.

Cheryl LaFleur, acting chairwoman of the Federal Energy Regulatory Commission, told the Senate Energy Committee on Thursday that employees are "wiping and scrubbing all databases'' and taking other steps to protect sensitive information.

The commission also has directed a nonprofit entity that oversees electric reliability to develop physical security standards for the grid by early June.

In issuing the order, the agency recognized that most utilities already have taken steps to identify critical structures and protect them from attack, LaFleur said. 

"A mandatory standard will reinforce these efforts and ensure that all owners and operators of the bulk power system take such important steps where appropriate,'' she said.

LaFleur's testimony came a day after a government investigator said commission employees improperly allowed widespread access to a sensitive document that outlined specific locations where the nation's electric grid is vulnerable to physical threats.

A document created by the commission in response to the April 2013 attack on the California substation should have been kept secret as a national security matter, Energy Department Inspector General Gregory Friedman said Wednesday. Instead the information was provided in whole or in part to federal and industry officials in unsecured settings.

The Wall Street Journal reported last month that a federal analysis indicated that a coordinated terrorist strike on just nine key electric transmission substations could cause cascading power outages across the country in each of the nation's three synchronized power networks.

LaFleur denounced the newspaper report as "highly irresponsible'' but did not refute its contents.

"While there may be value in a general discussion of the steps we take to keep the (power) grid safe, the publication of sensitive material about the grid crosses the line from transparency to irresponsibility and gives those who would do us harm a roadmap to achieve malicious designs,'' LaFleur said.

Wrongful use of sensitive information by an energy commission employee or former employee could result in penalties, including firing, LaFleur said, but added: "I have no reason to believe'' the leak was a criminal matter.

LaFleur acknowledged that the agency needs to improve training for handling of classified information but said as a longtime commissioner that the agency has a strong culture of ensuring that sensitive information remains confidential. Information about potential mergers or important licensing decisions, for instance, is not leaked before its official release, she said.

"We deal with confidential information all the time,'' she said.

Sen. Lisa Murkowski of Alaska, the senior Republican on the energy panel, called the inspector general's report "extremely troubling'' but praised LaFleur's response.

Still, Murkowski said it is "likely impossible to ensure that every part of the grid could withstand physical or cyberattack.'' The government as a whole needs to redouble efforts to ensure grid reliability and security, Murkowski said, adding that it is not clear whether new legislation is needed.

"Clearly the commission must do better going forward to protect nonpublic information from disclosure. The challenge before us is how to maintain and improve reliability and affordability while keeping environmental performance in balance,'' Murkowski said.

The panel's chairwoman, Sen. Mary Landrieu, D-La., said it was fortunate that the 2013 attack on the Pacific Gas & Electric Co. substation near Metcalf, Calif., did not result in a blackout in Silicon Valley, "the horrors of which could only be imagined.''

Landrieu did not address the question of terrorism but said the widely reported incident "came very close to causing the shutdown of a large portion of the Western Grid.''

Possible attacks on the grid must be taken seriously, "but the response must fit the size and the nature of the threat. One size does not fit all,'' Landrieu said.

Associated Press writer Garance Burke in San Francisco contributed to this story.

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